Aon: record $785bn reinsurance capital fuels April 1 buying surge

Global reinsurance capital reached a record $785bn at the April 1 renewals, as insurers took advantage of favourable market conditions to expand protection and support growth ambitions, according to Aon.

The reinsurance broker’s “Reinsurance Market Dynamics April 2026 Renewal” report shows demand for reinsurance rose by around 10%, with buyers increasing limits, adding frequency covers and exploring additional purchases post-renewal.

Abundant capacity drove double-digit rate reductions across several markets, particularly in Asia Pacific, where pricing fell by as much as 20% in countries including Japan, Korea and India.

In the US, competition across both traditional reinsurance and insurance-linked securities markets also led to significant pricing reductions, while enabling insurers to transfer more risk through expanded structures.

Aon said reinsurers delivered an average return on equity of 17%, marking a third consecutive year of strong performance, supported by underwriting profitability and investment returns.

George Attard, chief strategy officer and global head of analytics for Aon Reinsurance Solutions, said reinsurance is increasingly being used as a strategic growth tool.

“Taking a proactive, strategic approach to using reinsurance capital as an enabler allows our insurer clients to embrace risk and drive profitable growth ambitions through 2026 and beyond,” he said.

“In this environment, reinsurance provides insurers with powerful tools to manage volatility, protect profitability and invest confidently in new lines of business, geographies and emerging risks, as well as pursuing inorganic growth opportunities – a key trend highlighted in our report,” he continued.

“Such actions will help insurers outperform peers as the market cycle evolves,” Attard added.

The report highlights that strong capacity and competition were particularly evident in property lines and lower layers of reinsurance programmes, where reinsurers and ILS investors actively deployed capital.

This translated into broader coverage options, higher commissions on proportional placements and more flexible programme structures, allowing insurers to enhance protection while reducing overall cost.

Steve Hofmann, Americas CEO for Aon Reinsurance Solutions, said current conditions remain sustainable despite competitive pressures.

“The combination of strong capitalization and disciplined underwriting provides confidence that current pricing levels remain sustainable, allowing buyers to benefit from improved protection today without undermining longer-term market stability,” he said.

Buyers also used the renewal to reassess risk appetite, with many purchasing retention buy-downs and additional frequency protection to strengthen downside resilience and improve earnings stability.

Looking ahead, Aon expects increasing pressure on primary rates over the next 12 to 18 months, placing greater emphasis on capital efficiency and disciplined growth strategies.

Alfonso Valera, international CEO for Aon Reinsurance Solutions, said insurers are evolving their approach to reinsurance purchasing.

“As volatility increases and primary market competition intensifies, insurers are increasingly using reinsurance as a strategic tool rather than a purely transactional purchase,” Valera said.

“Buyers are exploring a broader mix of solutions – including facultative reinsurance, portfolio facilities, proportional covers and multi-year arrangements – to smooth earnings, lower cost of capital and support long-term planning,” he added.